The Impact Of Air Quality On Stock Market

The stock market has always been one of the hot topics of social concern.Especially with the acceleration of the process of economic liberalization in China,the trading mechanism of China’s stock market is becoming more mature,and the scale and activity of transactions are increasing.However,although there have been many developments in the theory of stock market,there are still some "anomalies" in the stock market that can not be explained by the traditional theory of finance,such as the abnormal volatility of stock returns in extreme weather,the plate effect of the stock market,and the herd effect in the stock market.Therefore,this paper applies the behavioral finance theory to establish the relationship between the air quality and the stock market,and examine how the air quality affects the index changes in the stock market and explore the possible mechanism of the impact.The study in this paper can provide new ideas for the research field of the influencing factors of the stock market,and also provide some reference suggestions for the field of environmental protection and finance.On the basis of collation of relevant literature at home and abroad,this paper introduces the theoretical basis of traditional finance and behavioral finance,and summarizes and analyzes the possible influence mechanism of air quality on the stock market.Next,this paper constructs the variable of air economy,a variable representing the national air average,and carries out linear regression analysis on the stock variables of the A share market in China.On this basis,this paper carries out three steps of robustness test,that is,linear regression analysis after adding B share data,regression analysis after adding macroeconomic variables and the regression analysis of 5 key cities in China.According to the results of the data analysis,this paper concludes that the average national air quality will have a negative impact on the stock market.Although the air quality has no significant impact on the average returns of the listed companies in the region,the average turnover rate and average of all listed companies in the region are not significant.The effect of air quality on stock market may be affected by regional environmental protection plate and investor behavior.The results of this study can be further explored in the following directions,such as the impact of air quality on the micro mechanism of the stock market,the long-term effect of air quality on the stock market,and whether the impact of air quality factors on the stock market can bring arbitrage opportunities.